COMEX Copper Comes Down Amid Tariff Confusion and Market Volatility

COMEX Copper Price Volatility and Tariff Impact

Copper remains crucial for construction, power, and emerging tech like AI and EVs, which drives its demand globally. However, the COMEX copper price recently faced sharp volatility due to tariff announcements unrelated to actual physical demand. In early July, the market surged on fears that U.S. tariffs would include copper cathode imports. This misunderstanding triggered a rush to import copper into the U.S., causing a historic price arbitrage between COMEX and the London Metal Exchange (LME). Once clarified that tariffs targeted copper products—not cathodes—the COMEX price rapidly corrected downward.

David Brooks, global head of metals at Argus, explains that tariffs on finished copper products aim to boost domestic manufacturing of tubes and wires essential for energy transitions. Meanwhile, U.S. cathode inventories ballooned from 40,000 tons last year to 300,000 tons in July, reflecting rapid stockpiling rather than growing demand. The recent recognition of a new CME warehouse in New Orleans further inflated U.S. inventory figures, though this shift mainly involved relocating stocks from LME and Shanghai exchanges rather than a global supply increase.

Industry Responses and Market Adaptations to Copper Price Changes

Aurubis, a Germany-based metals smelter expanding in Georgia with an $800 million investment, underscores the significance of U.S. market growth and favorable energy pricing. Commercial Director Naveed Moghadam highlights the company’s ability to process diverse scrap streams, including shredded copper from auto recycling and printed circuit boards. Aurubis’s flexible approach allows acceptance of various copper qualities, positioning it as a key player amid market fluctuations caused by tariff uncertainty.

Recyera, a Kentucky-based tech firm, addresses sorting challenges for fine copper scrap. CEO Joshua Werner notes their innovative technology enables precise material separation and feedstock tuning, enhancing recycling efficiency. These advancements offer solutions to fluctuating scrap quality and volumes, crucial for maintaining supply chain resilience amid price volatility.

SuperMetalPrice Commentary:

The COMEX copper price rollercoaster illustrates how policy signals, rather than fundamental demand, can dramatically impact metals markets. Misinterpretations around tariffs triggered rapid inventory movements and price dislocations, emphasizing the need for clear communication from regulators. Meanwhile, investments by firms like Aurubis and Recyera demonstrate the industry’s commitment to adaptability and innovation. These efforts will prove vital as copper remains indispensable in global decarbonization and technology expansion. Tracking inventory shifts and tariff developments will be critical for market participants aiming to navigate ongoing uncertainty.